Notes to Accounts of Ahimsa Industries Ltd.

Mar 31, 2016

1. The Financial Statements for the year ended on 31st March, 2016 are prepared based on Schedule III of Companies Act, 2013.

2. The financial statements including financial information have been prepared after making such regroupings and adjustments, considered appropriate to comply with the same. As result of these regroupings and adjustments, the amount reported in the financial statements/information may not necessarily be same as those appearing in the respective audited financial statements for the previous year.

3. The Micro Small and Medium Enterprise registered under The Micro small and Medium Enterprise Development Act 2006 have been taken based on the list of MSME creditors provided by the management. However, as the Company has not received any claims in respect of such interest and as such, no provision has been made in the books of accounts.

4. Segment Reporting: - Segment Reporting of the company based on Product is described in the below mentioned table: -

5. The below mentioned contingent Liabilities are standing as on the Balance Sheet Date:

6. The State of Gujarat through Commissioner of Commercial Tax, C -2, RajyaKar Bhavan, Ashram Road, Ahmedabad has filed an appeal against the order of Gujarat Valued Added Tax Tribunal, Ahmedabad has ordered to consider PET Perform is being Packing Material falling under Entry 55 of Schedule ll of the Gujarat Value Added Tax, 2003 whereas The Department of Commercial Tax-Gujarat filled an Appeal into a High Court of Gujarat against the order of tribunal to consider the Entry treated as Residuary Entry 87 of 2nd Schedule of The Gujarat Value Added Tax, 2003 and levy the Tax @ 12.5% plus 2.5% as Additional lax instead of 4% plus 1% as Additional Tax as ordered by Gujarat Value Added Tax Tribunal, Ahmedabad. Amount of the Liability cannot be quantified. lf Honourable High Court of Gujarat set aside the order of the Tribunal, the Liability may arise on the sales made at Local Rate.

7. The company has executed Bond for Rs.50 Lacs (Fifty Lacs only) for non-payment of Central Excise Duty for purchase of excisable goods. in the event of failure of export of the goods as per the terms and conditions of Bond executed is not made than Excise Duty is payable to the extent applicable.

8. The Company Has Imported Plant and Custom duty is not paid to the amount of?96.21/- Lacs (with 15% interest per annum) on the basis of the undertaking given to the president of India, The Assistant Commissioner of Customs ICD-Khodiyar, Gandhinagar. They will export the goods manufactured form imported plant within the period of Eight years. The obligation as specifying terms of the notification of the Government of India in the ministry of Finance (Department of Revenue) No. 102/2009 Dated 11.09.2009.

9. The Company Has Imported Plant and Custom duty is not paid to the amount of Rs.116.33 Lacs (with 15% interest per annum) on the basis of the undertaking given to the president of India, The Assistant Commissioner of Customs ICD-Khodiyar, Gandhinagar. They will export the goods manufactured form imported plant within the period of Eight years. The obligation as specifying terms of the notification of the Government of India in the ministry of Finance (Department of Revenue) No. 102/2009 Dated 11.09.2009.

The Contingent Liabilities which can be ascertained and quantified are mentioned in the below mentioned Table:-

10. Accounting for Taxes on Income (AS 22) Deferred Tax liability/Asset in view of Accounting Standard - 22: - "Accounting for Taxes on Income" as at the end of the year/period is reported in the below mentioned table: -

11. Realizations: -In the opinion of the Board and to the best of its knowledge and belief, the value on realization of current assets, loans and advances will, in the ordinary course of business, not be less than the amounts at which they are stated in the Balance sheet.

12. MAT Credit: -During the previous years the company did not record any MAT Credit but considered the same as DTA, the same has been rectified and regrouped in current financial statement, In the current year MAT Credit have been created by the company in the books based on the amounts paid previously.

13. Amounts in the financial statements Amounts in the financial statements are rounded off to nearest rupee. Figures in brackets indicate negative values.

14. Confirmations / certificates in respect of unsecured loans, advances from customers, advances recoverable in cash or in kind, investments and various other parties are awaited.

15. The management of the company has carried out an exercise to ascertain impairment of Fixed Assets, if any, In the opinion of the management of the company there are no indication of impairment of assets as at 31/03/2016 and therefore no effect of impairment is required to be given in the books of account.

16. Cash Balance is taken as valued & certified by management.

17. Pending Litigations and Criminal Proceedings: -

Except as stated below there are no outstanding litigations, suits, criminal or civil prosecutions, proceedings or tax liabilities against/by our Company, our Directors, our Promoters and our Group Entities and there are no defaults, non-payment of statutory dues, over-dues to banks/financial institutions, defaults against banks/financial institutions by our Company, default in creation of full security as per terms of issue/other liabilities, no amounts owed to small scale undertakings or any other creditor exceeding Rs.1 lakh, which is outstanding for more than 30 days, no proceedings initiated for economic/civil/any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (I) of Part 1 of Schedule V to the Companies Act) other than unclaimed liabilities of our Company and no disciplinary action has been taken by SEBI or any stock exchange against our Company, our Promoters, our Directors and Group Entities.

Further, except as stated herein, there are no past cases in which penalties have been imposed on our Company, our Promoters, our Directors or our Promoter Group Entities, and there is no outstanding litigation against any other Company whose outcome could have a material adverse effect on the position of our Company. Further, there are no cases of litigation, defaults etc. in respect of companies/firms/ventures with which the Promoters were associated in the past but are no longer associated, in respect of which the name(s) of the Promoters continues to be associated.

Further, apart from those as stated below, there are no show-cause notices / claims served on our Company, our Promoters, our Directors or our Group Entities from any statutory authority / revenue authority that would have a material adverse effect on our business.

Ahimsa Industries Pvt Ltd served notice dated 22.05.2015 under Section 138 of the Negotiable Instrument Act 1881 to M/s Sahyadri Food and Agro Industries for demanding the due amount of Rs.21,23,403/-along with interest @ 24% per annum till the time of actual payment within a period of 15(fifteen) days from the date of receipt of above notice in respect of supplies made hereunder.

When the aforesaid cheques were presented by M/s. AHIMSA INDUSTRIES PRIVATE LIMITED to their Bankers i.e. Bank of Maharashtra, the same were returned unpaid by the Bank with the remarks/reasons "insufficient Funds" in Bank Account of M/s Sahyadri Food and Agro Industries. Sahyadri Food requested to deposit the Cheques again but to be returned unpaid. The Company is in the process of filing case against of M/s Sahyadri Food and Agro Industries under section 138 of Negotiable Instruments Act.

18. M/s Ahimsa Industries Pvt Ltd has sold PET Preform on 23.08.2012 vide Tax Invoice No.106. Company file an application inquiring about the applicable rate of tax on the sale of this product to be used as packing material. The appellant has contended that the PET Preform is a packing material and it falls under Entry 55 of Schedule II to the Gujarat Value Added Tax Act, 2003 on 30.08.2012. However, the learned Joint Commissioner of Commercial Tax (Legal) Vide Order No. VAT/Sec. 80/2012/D/237/J.504/507 had determined dated on 20/11/2012 held that PET preform is not a Packing Material and its included as Residuary Goods. He held that it is covered under Entry 87 of Schedule II to the Act and it is accordingly taxable at the rate of 12.5% plus 2.5% additional tax. Instead of 4% 1% as charged by company.

19. In against the order No. VAT/K-80/2012/D/237/J.504/507, dated 20.11.2012 of the learned Joint Commissioner of Commercial Tax, Company filed appeal, dated 28.11.2012 in the Gujarat Value Added Tax Tribunal, Ahmedabad. The Hon''ble Bench vide in its Order No. B-1718/2013/First Appeal No.9/12 dated 24.04.2013 of Tribunal held that a PET Preform is convenient form of packing and strictly used as end product for packing purposes only. Therefore, it is held to be declared as polythene packing material falling under Entry 55 of Schedule II to the GVAT Act and liable to be taxed accordingly and the same cannot be treated under residuary Entry 87 of Schedule II to the Act. The order of the determining authority is therefore, not just and proper and the appellant is not liable to be taxed @ 12.5% plus 2.5% by way of additional tax.

20. Being aggrieved and dissatisfied by the Judgment and order dated 24/04/2013, passed in First appeal no. 9 of 2012 by Hon''ble Gujarat Value Added Tax tribunal at Ahmedabad the State of Gujarat through the Commissioner of Commercial tax (Applicant) filed appeal against M/S Ahimsa Industries Pvt. Ltd. (Respondent) under the Tax Appeal No.1354 of 2014 dated on 13/05/2014 before the Hon''ble High Court of Gujarat at Ahmedabad. Now the proceeding of this case are pending in the Hon''ble High Court of Gujarat.

-Outstanding Demands relating to Direct Taxes: -

The total amount outstanding relating to Tax Deducted at Source (TDS) which are verified through the Traces Portal are attached in the below mentioned table: -

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Mar 31, 2015

1. Confirmation of Batances has not been obtained from Debtors / Creditors therefore as per the books of accounts only.

2. Previous Year's figures have been regrouped and re-arranged wherever it is necessary. Figures shown in the bracket is related to Ihe previous year.

3. Duty drawback has been accounted on actual receipt basis.

4. Related Party Transa tlion Di scl osure.

In accordance with the requirement of accounting standard 1SH

"Related Party Disclosure5n Notified by the Central Government Under the companies the Act, 2003. the details of related party transaction are given below.

a) Listof Related parties :

Description of Relationship Names of related parties

Company in which directors of the company is able Genera) Additives Put Ltd to exercise control or have significant influence

Mr.Ashutosh D.Gandhi -

Managing Director

Mrs.Sneha A.Gandhi - Key Management Perscnnel (KMP) Whole-time DirectoR

Shrenik M, Kriatwala - CFO

Gajara J. Joshi - CS

Relative of Kay Management Personnel " Salortl A Gandhi- Daughter of MD

Ashu tosh 5" Gandhi HUF

Chatna S. Kh atwala - Wife of CFO

5. CONTINGENT LIABILITY,

(i) The company has executed Bond for Rs. 50/- lacsCFrfty Lacs oniy) for nonpayment of Central Excise Duty for purchase cf excisable goods. In the event erf failure of export of the goods as per the terms and conditions of Bond executed is not made than Excise Duty is payable to the extent applicable.

(ii)The company has imported plant and customs duty is not paid to the amount of Rs. 96.21/- Lacs {with 15% interest per annum) on the basis of undertaking given to the President of the India, The Assistant Commissioner of Customs ICD-Khodiyar, Gandhinagar. They will export the goods manufactured form Imported plant within the period of Eight Years. The obligation as specifying terms of the notification of the Government of India in the ministry of Finance (Department of Revenue) No. 102/2009 Dated 11.06.2009

(iii) The company has imported plant and customs duty is not paid to the amount of Rs. 116.33/- Lacs (with 15% interest per annum) on the basic of undertaking given to the President of the India, The Assistant Commissioner of Customs ICD- Khodiyar, Gandhinagar. They will export the goods manufactured form imported plant within the period of Eight Years. The obligation as specifying terms of the notification of the Government of India in the ministry of Finance (Department of Revenue] No. 102/2009 Dated 11.00.2009

In case of failure of fulfillment said obligation the company will be liable to pay customs duties and interest thereon.

(iv) Trie State of Gujarat through Commissioner of Commercial Tax,C-2,Rajya Kar Btiavan.Ashram Road. Ahrnadabad has filled en appeal against the order of Gujarat Valued Added Tax Tribunal, Ahmedabad has ordered to consider PET Preform is being Packing Material falling under Entry 55 of Schedule II of the Gujarat Value Added Tax. 2003 wnareas The Department of Commercial Tax, Gujarat filled an Appeal intD a High Court of Gujarat against the ordered of the Tribunal to consider the Entry treated as Residuary Entry 87 of 2nd Schedule of The Gujarat VaJue Added Tax. 2003 and ievy the Tax @ 12.5% plus 2.5% as a Additional Tax Instead of 4% plus 1% as Additiona] Tax as ordered by Gujarat Vulue Added Tax Tribunal, Ahmedabad .Amount of Ihe Liability can not be quantified. If Honorable High Court of Gujarat set aside the order of the Tribunal, the Liability may arise on the sales made at Local Rate.

- Figures aire Certified by the. Management.

** As the company make an arrange for required Plant and Machineries from outsiders1 agencies, therefore company has no installed capacity during year under review.

- This figure includes Job Wcurk carried out of 3124 KG.